CMA Pavani (Cost Accountant) (33 Points)
24 December 2008Is service tax charged to company on sodexo meal passes for its employees is eligible for cenvat credit?Sodexho meal pass is not under FBT.Can cenvat be availed?
Kalpesh
(CA)
(82 Points)
Replied 24 December 2008
since it is expenses on employees, not directly connected with business, cenvat credit may be challanged by the dept.
Chirayu Kothi
( Consultant Excise and Service Tax)
(248 Points)
Replied 24 December 2008
Hi Pavani
Jst go threw the defenition of "input service" which is not contain any thing which is not directly related to manufacuring or serivce provided by assesee.
As per my view the CENVAT can not be taken on the Sodaxo Meal coupon as similer case of Security Agency Service for officers' residence of company cant claim for CENVAT.
CA. Dashrath Maheshwari
(TaXpert)
(15103 Points)
Replied 24 December 2008
Sodexho Pass Services gets relief from Service Tax liability for the period prior to 01.05.2006 – Finding a prima facie case, Tribunal grants waiver of pre-deposit and Stays recovery
By TIOL News Service
MUMBAI, NOV 14, 2008 : 
BRIEF facts of the case are that the applicants are issuing meal and gift vouchers to corporate clients and were receiving service charges. Lower authorities held that the appellant needs to discharge Service tax liability on the amount of service charges received from the clients to whom the meal and gift vouchers are sold and also from the amount which they paid to the affiliates.
The adjudicating authority dropped the proceedings initiated under section 65(96) but confirmed the demand under the services Business Auxiliary Services as being enumerated in section 65(19) of the Finance Act, 1994.(!)
The appellant is before the Tribunal with the submission that the said definition is not applicable as they are not promoting or marketing and, at the most, the services rendered by them may be covered under Section 65(33A) ["credit card, debit card, charge card or other payment card service"] or 65(104C) ["support services of business or commerce"] of the Finance Act, 1994, both of which were introduced with effect from 01.05.2006 and they have already taken service tax registration under section 65(104C) and were discharging service tax liability from 1.5.2006.
Reliance is also placed upon various decisions of the Tribunal to advance the proposition that once the services are brought under Service tax net from a particular date, without amending the definition of a pre-existing category of service, it is presumed that these services were not covered in earlier services and are liable to be taxed from the date of introduction. (Trumac Engg. [ 2008-TIOL-198-CESTAT-AHM]; Cameo Corporation Service [ 2008-TIOL-1084-CESTAT-MAD . ] cited).
The representative of Revenue does not agree with these arguments and argues that the services which are rendered by the applicant should definitely get covered under the provisions of Section 65(19) of the Finance Act, 1994 as the appellants are ‘promoting and marketing the goods which are produced by their affiliates’; that the introduction of new services with effect from 1.5.2006 could not be said to have excluded these services from Service Tax net for the earlier period.
The Bench after considering the submissions observed that the very same services as has been done by applicant is included in the ‘Business Support Services’ and has been introduced with effect from 1.5.2006 under sub-section 104C of Section 65 of the Finance Act, 1994. Finding strong force in the submission that once specific services are introduced as taxable from a particular date, then the same could not get covered in earlier services, as held by the Tribunal in the case of Trumac Engg, the Bench observed that the applicant has made out a prima facie case for waiver of pre-deposit of the amounts involved.
Accordingly, the application for waiver of pre-deposit of the amounts involved was allowed and recovery thereof stayed till disposal of the appeal.
Brunch at cafeteria: Now, for some Cenvat Credit on these services as Input services!
CMA Pavani
(Cost Accountant)
(33 Points)
Replied 25 December 2008
Then what will be the treatment of service tax paid on hotel expenses while conducting sales conference.The expenditure is considered as marketing expenditure in books.
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